Understanding the Current Rating
The Strong Sell rating assigned to Super Tannery Ltd indicates a cautious stance for investors, signalling significant concerns across multiple dimensions of the company’s fundamentals and market behaviour. This rating is derived from a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment, helping investors understand the risks and opportunities associated with the stock.
Quality Assessment
As of 10 February 2026, Super Tannery Ltd’s quality grade remains below average. The company’s long-term fundamental strength is weak, with an average Return on Capital Employed (ROCE) of just 7.13%. This figure suggests that the company is generating limited returns relative to the capital invested, which is a critical indicator of operational efficiency and profitability.
Moreover, the company’s growth trajectory has been modest at best. Over the past five years, net sales have grown at an annual rate of 11.11%, while operating profit has increased by 14.65% annually. Although these growth rates are positive, they are not sufficiently robust to offset other financial weaknesses. The company’s ability to service its debt is also a concern, with a high Debt to EBITDA ratio of 3.39 times, indicating elevated leverage and potential liquidity risks.
Quarterly performance metrics further highlight challenges. The Profit After Tax (PAT) for the latest quarter stands at ₹0.69 crore, reflecting a sharp decline of 64.9% compared to the previous four-quarter average. Net sales for the quarter are at a low ₹62.15 crore, and Profit Before Tax excluding other income is also at a quarterly low of ₹0.53 crore. These figures underscore the operational difficulties the company is currently facing.
Valuation Perspective
Despite the weak quality metrics, Super Tannery Ltd’s valuation grade is classified as very attractive. This suggests that the stock is trading at a price level that may offer value relative to its earnings and asset base. For value-oriented investors, this could present a potential entry point, provided they are comfortable with the associated risks.
However, it is important to note that attractive valuation alone does not guarantee positive returns, especially when underlying financial trends and technical indicators are unfavourable. Investors should weigh valuation against other factors before making investment decisions.
Financial Trend Analysis
The financial grade for Super Tannery Ltd is negative as of 10 February 2026. The stock has delivered a disappointing performance over the past year, with a return of -30.93%. This underperformance extends to longer time frames as well, with the stock lagging behind the BSE500 index over the last three years, one year, and three months.
Shorter-term returns show some volatility: the stock gained 4.08% in the last trading day and 15.47% over the past month, but these gains are overshadowed by a 16.02% decline over the last six months. Year-to-date, the stock has appreciated by 7.10%, yet this modest recovery does not compensate for the sustained negative trend.
These figures reflect ongoing challenges in the company’s financial health and market sentiment, reinforcing the cautious stance implied by the Strong Sell rating.
Technical Outlook
From a technical perspective, the stock is mildly bearish. This suggests that recent price movements and chart patterns indicate downward momentum or limited upside potential in the near term. Technical analysis complements fundamental assessments by providing insights into market psychology and trading behaviour, which are crucial for timing investment decisions.
Given the mildly bearish technical grade, investors should be wary of potential further declines or sideways price action, especially in the absence of positive fundamental catalysts.
Summary for Investors
In summary, Super Tannery Ltd’s current Strong Sell rating reflects a combination of below-average quality, very attractive valuation, negative financial trends, and mildly bearish technical signals. The company’s weak profitability, high leverage, and disappointing returns weigh heavily against its attractive valuation, signalling significant risks for investors.
For those considering exposure to this stock, it is essential to understand that the rating implies a recommendation to avoid or reduce holdings due to the elevated risk profile. Investors seeking value should carefully monitor any improvements in the company’s fundamentals and market conditions before reconsidering their stance.
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Company Profile and Market Context
Super Tannery Ltd operates within the diversified consumer products sector and is classified as a microcap company. Its modest market capitalisation reflects its relatively small size in the broader market landscape. This positioning often entails higher volatility and risk, which is consistent with the current rating and performance metrics.
The company’s recent stock price movements, including a 4.08% gain on the latest trading day and a 15.47% increase over the past month, indicate some short-term interest. However, these gains are insufficient to offset the broader negative trend and fundamental weaknesses.
Implications of the Mojo Score and Grade
The Mojo Score for Super Tannery Ltd currently stands at 23.0, down from 32.0 prior to the rating update on 18 Nov 2025. This decline in score reflects deteriorating fundamentals and market sentiment. The Mojo Grade of Strong Sell is the lowest rating in the MarketsMOJO framework, signalling a strong recommendation to avoid the stock based on current data.
Investors should interpret this rating as a cautionary signal, suggesting that the risks outweigh potential rewards at this time. The combination of weak quality, negative financial trends, and bearish technicals outweighs the attractive valuation, making the stock unsuitable for risk-averse portfolios.
Looking Ahead
For Super Tannery Ltd to improve its rating, investors would need to see meaningful enhancements in profitability, debt management, and consistent positive returns. Additionally, a shift in technical indicators towards a more bullish outlook would support a more favourable rating. Until such improvements materialise, the Strong Sell rating remains a prudent guide for investors.
Conclusion
Super Tannery Ltd’s current Strong Sell rating by MarketsMOJO, last updated on 18 Nov 2025, is grounded in a thorough analysis of the company’s quality, valuation, financial trends, and technical outlook as of 10 February 2026. While the stock’s valuation appears attractive, significant concerns about profitability, leverage, and market performance justify a cautious approach. Investors should carefully consider these factors when evaluating their exposure to this stock.
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